Take egg yolks in a bowl and beat it along with caster sugar until light and fluffy.
Boil the milk or cream in a saucepan. Reduce heat and keep stirring so that a film doesn't form on top.
Preheat the oven to 150 degree C.
Increase the flame and bring the milk / cream to boil. Stir in vanilla essence. Remove from flame and pour it over the egg mixture little by little and whisk briskly. Keep beating until it becomes slightly thick. The mixture thickens since the eggs start getting cooked.
Now pour in the mixture into ramekins until 3/4th full and place them on a large baking dish with water at least half way up the sides of the ramekins. This process of baking is called Bain-marie. Put the baking dish on the center rack of the oven and bake for 25 - 28 mins until the pudding is done. It is very much fine if the center is wobbly, it will set when refrigerated.
Remove the pudding from the water and refrigerate it for atleast 3 hours.
Just before serving remove from fridge and sprinkle caster sugar evenly on top of the pudding and caramelize it using a blow torch. You can use a grill or broiler too.